5 ms·

I suspect we wouldn't be so adverse to binding arbitration if it were set up in a truly fair way: right of disclosure to both parties, ability to have class act

I suspect we wouldn't be so adverse to binding arbitration if it were set up in a truly fair way: right of disclosure to both parties, ability to have class action, ability to assess records of similar cases with the arbitrator to assess their ability to be neutral, etc. But these start to raise costs and make arb similar to the formal court system, which it's designed to work around. Is there a benefit to one side or the other to have this lack of rigor and consistency? All the rules seem different for arb: no consistent rules of evidence, tons of decisions just left up to each individual arbitrator. One could say, I guess, that this is a marketplace freedom, like shopping around for the patent court friendly to original inventors, etc. In this marketplace, you can find an arb closest to how you hope your case will go, who will do things the way you want to, perhaps. But it's a forced marketplace, not one that I get to opt into or out of for so many interactions these days. Forced arb was supposed to make things better. Do we have any evidence that it does, and for whom?

pessimizer 5y ago
> Forced arb was supposed to make things better. Was it, though? It was supposed to make things better for the party that is forcing the arb, and it does. Everything that I force anyone but my kids to do is going to be for my own advantage. If is weren't better for them, they'd probably stop doing it, rather than doing it more and lobbying against restrictions on it.
techsupporter 5y ago
> Forced arb was supposed to make things better. The purpose of the Federal Arbitration Act was not to make things better for end customers like you and I. The law was passed because judges at the time (in 1926, for what it's worth) were reluctant to enforce decisions reached through arbitration in courts because judges saw arbitration as either a reduction of judicial authority or less fair and open than a judicial proceeding. Both views were held at the time, take your pick for which one you prefer. Arbitration was originally supposed to be about two parties of roughly equal negotiation and information-acquisition power being able to work out arguments between themselves. Inherently, this meant business-to-business complaints with each other. You and I are not on equal footing and with the overwhelming majority of entities with which we contract, nor can we easily negotiate the terms of those contracts, both of which were features of the entities who originally wanted to use binding arbitration. But over the years, businesses that provide services to individual customers figured out that getting sued was expensive and decades of "ambulance-chasing class action lawyers are unfair!" turned the tide against using courts as neutral forums. Supreme Court decisions relating to the arbitration act over the past thirty years or so have effectively slammed the door on using courts and some members of Congress don't seem motivated to change this. (Note that I am biased against binding arbitration agreements. I think them unconscionable, and I laugh endlessly when "well-intentioned" companies that do a Show HN here have them in their terms.)
- mwexler 5y ago
  Good info. I really thought it was done as a faster alt to the court system, and this history reveals that it's business all the way. Sigh.
mindslight 5y ago
> Forced arb was supposed to make things better. Do we have any evidence that it does, and for whom? The primary goal is for businesses to escape accountability under the legal system, and I'm sure it does or they would stop pushing this nonsensical crap. And like always, if only individuals could similarly limit their liability in such ways, we would need a lot less insurance! The only thing that would redeem arbitration is getting rid of mandatory arbitration. There is no problem with the possibility of being able to assent to binding arbitration once you've got a dispute, if both parties think it's beneficial. The problem is companies forcing these terms onto us ahead of time via the fallacy of contract, allowing to arbitration industry to function with perverse incentives.

pessimizer 5y ago

> Forced arb was supposed to make things better. Was it, though? It was supposed to make things better for the party that is forcing the arb, and it does. Everything that I force anyone but my kids to do is going to be for my own advantage. If is weren't better for them, they'd probably stop doing it, rather than doing it more and lobbying against restrictions on it.

techsupporter 5y ago

> Forced arb was supposed to make things better. The purpose of the Federal Arbitration Act was not to make things better for end customers like you and I. The law was passed because judges at the time (in 1926, for what it's worth) were reluctant to enforce decisions reached through arbitration in courts because judges saw arbitration as either a reduction of judicial authority or less fair and open than a judicial proceeding. Both views were held at the time, take your pick for which one you prefer. Arbitration was originally supposed to be about two parties of roughly equal negotiation and information-acquisition power being able to work out arguments between themselves. Inherently, this meant business-to-business complaints with each other. You and I are not on equal footing and with the overwhelming majority of entities with which we contract, nor can we easily negotiate the terms of those contracts, both of which were features of the entities who originally wanted to use binding arbitration. But over the years, businesses that provide services to individual customers figured out that getting sued was expensive and decades of "ambulance-chasing class action lawyers are unfair!" turned the tide against using courts as neutral forums. Supreme Court decisions relating to the arbitration act over the past thirty years or so have effectively slammed the door on using courts and some members of Congress don't seem motivated to change this. (Note that I am biased against binding arbitration agreements. I think them unconscionable, and I laugh endlessly when "well-intentioned" companies that do a Show HN here have them in their terms.)

mwexler 5y ago
Good info. I really thought it was done as a faster alt to the court system, and this history reveals that it's business all the way. Sigh.

mindslight 5y ago

> Forced arb was supposed to make things better. Do we have any evidence that it does, and for whom? The primary goal is for businesses to escape accountability under the legal system, and I'm sure it does or they would stop pushing this nonsensical crap. And like always, if only individuals could similarly limit their liability in such ways, we would need a lot less insurance! The only thing that would redeem arbitration is getting rid of mandatory arbitration. There is no problem with the possibility of being able to assent to binding arbitration once you've got a dispute, if both parties think it's beneficial. The problem is companies forcing these terms onto us ahead of time via the fallacy of contract, allowing to arbitration industry to function with perverse incentives.